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Entries in Fine (4)

Saturday
Jan052013

Macy's, Sears, Amazon, Max Studio Fined for 'Bamboozling' Customers

Bloomberg News Photo by Diane Bondareff(NEW YORK) -- Four national retailers have agreed to pay $1.26 million in penalties for falsely labeling clothing and textiles as made of bamboo, when they were actually made of rayon, a synthetic material.

The Federal Trade Commission announced this week that Amazon.com, Leon Max, Inc., Macy's, and Sears, Roebuck and Co. ignored warning letters the commission sent to companies in early 2010.

Accordingly, the four companies agreed to pay penalties totaling $1.26 million to settle charges that they violated the Textile Products Identification Act and the FTC's "Textile Rules" by mislabeling and advertising products as made of bamboo.

The FTC warned that unless a product is made directly with bamboo fiber, often called "mechanically processed bamboo," it can't be called bamboo.

In a guideline issued to companies, the FTC refers to the mislabeling practice as "bamboozling" customers.

Sears, which is the parent company of Kmart, agreed to pay $450,000. Amazon is paying $455,000 while Macy's will pay $250,000, and Leon Max, which produces Max Studio clothing, is paying $80,000.

The FTC said the varying penalties reflect how long the companies continued to sell mislabeled textiles after receiving the warning letter and the number of products sold.

"We cooperated with the FTC in reaching this settlement in lieu of pursuing further litigation," said Sears Holdings Corp. spokesman Howard Riefs in a statement. "We continue to take these regulations seriously."

A spokesman for Macy's declined to comment. Amazon and Max Studio did not return requests for comment.

The FTC said the companies will be required to ensure the labels and ads for bamboo textiles they sell "accurately indicate their fiber content."

For example, the FTC said Macy's allegedly used the terms "bamboo" and "bamboo fiber" on textile labels.

So-called bamboo textiles are often marketed as environmentally friendly, but the process for manufacturing rayon, even when it is made from bamboo, "is far from a 'green' one," the FTC said.

Rayon is sometimes made using "environmentally toxic chemicals in a process that emits hazardous pollutants into the air," the FTC said.

"While different plants, including bamboo, can be used as a source material to create rayon, there's no trace of the original plant in the finished rayon product," the FTC said in a guide for marketers.

Copyright 2013 ABC News Radio

Thursday
Jul122012

Report: HSBC Could Face $1B in Fines over Money Laundering

Simon Dawson/Bloomberg via Getty Images(NEW YORK) -- Sparks could fly at a Senate hearing on Tuesday when HSBC is set to apologize to members of a Senate investigative panel "for failing to have appropriate controls in place" to prevent money laundering and financing of terrorism, reports The Financial Times.

According to the newspaper, analysts estimate the wrongdoing may cost the bank up to $1 billion in fines.

HSBC's apology comes a week after the CEO of Barclays was forced to resign after the bank was hit by a huge fine by U.S. and British regulators for trying to influence the London Interbank Offered Rate (LIBOR) -- the worldwide benchmark for interest rates -- for a period of years dating back at least until 2005.

The LIBOR rate is supposed to reflect the rate at which top banks in London lend to each other.  It is used in the U.S. and other nations to set rates for student loans, mortgage rates, credit cards and car loans.

Copyright 2012 ABC News Radio

Tuesday
Dec202011

Infomercial King Kevin Trudeau Loses on $37.6 Million Appeal

Mark Wilson/Getty Images(NEW YORK) -- Infomercial king Kevin Trudeau, who got rich promoting what he claims are natural cures for just about every medical condition, has finally met a malady no amount of echinacea is going to remedy: The 7th U.S. Circuit Court of Appeals has upheld a lower court's decision that Trudeau must pay a $37.6 million fine for not being honest with consumers.

Trudeau, in an interview with ABC News, says he intends to fight on to defend his First Amendment right to speak and write freely, taking his appeal, if necessary, to the Supreme Court.  His only "crime," he says, is telling truths that challenge big pharma and other entrenched interests.

The $37 million fine is the amount courts and the Federal Trade Commission say consumers were defrauded by what they term deceptive infomercials used by Trudeau to promote his book The Weight Loss Cure 'They' Don't Want You to Know About.

Trudeau is also is author of Natural Cures 'They' Don't Want You to Know About, Free Money 'They' Don't Want You to Know About, and other titles, some of which have been best-sellers.

The fine originally was levied on him in 2009 by U.S. district court Judge Robert Gettleman, who found Trudeau to be in violation of a prohibition against his misrepresenting the content of his books in his infomercials.  Trudeau's infomercials, wrote Gettleman, had "falsely and intentionally led thousands (probably hundreds of thousands) of consumers to believe that the Weight Loss Book would describe an 'easy,' 'simple' protocol that, once 'finished,' would allow the consumer to 'eat anything' he or she wants."

The FTC's war with Trudeau began 1998, when Trudeau was charged with making what a commission statement calls, "false and misleading claims in infomercials for products he claimed could cause significant weight loss and cure addictions to heroin, alcohol, and cigarettes, and enable users to achieve a photographic memory."  Five years later, the FTC charged him with falsely claiming in infomercials that Coral Calcium Supreme could cure cancer.

Trudeau's response consistently has been that he is being persecuted by the government, by the pharmaceutical industry and others for daring to tell the truth -- for example, that you don't need to spend money on drugs to cure or prevent disease; you can accomplish the same thing with herbs and foods and lifestyle changes.

Trudeau says he will ask for his appeal to be heard next "en banc" by the court, meaning by all its judges at once. "If I don't get an appropriate outcome, then absolutely I'm taking it to the Supreme Court," he says.  A final legal resolution, he thinks, may not come for years.

Copyright 2011 ABC News Radio

Tuesday
Dec212010

Toyota to Pay $32.425 Million in Additional Fines over Recalls

Photo Courtesy - PRNewsFoto/Toyota Media Relations(WASHINGTON) -- Toyota Motor Corp. has agreed to pay the U.S. government a total of $32.425 million in additional penalties stemming from investigations into how the automaker handled two of its recalls.

The Department of Transportation announced Monday that Toyota will pay the maximum fines allowable in both cases for failing to comply with the necessary steps in reporting safety defects to the National Highway Traffic Safety Administration.

In the first investigation, Toyota was fined $16.375 million for its recall of nearly five million vehicles whose accelerator pedals could become trapped by floor mats.  The second case resulted in a $16.050 million penalty for how the automaker handled a recall involving models whose steering relay rods could break, causing the loss of steering control.

Copyright 2010 ABC News Radio







ABC News Radio